Q&As

Where a 50% beneficial interest in a residential property was left on discretionary Will trust and within two years was appointed to the surviving spouse for life, but with no provision made as to the remainder interest, what happens on the surviving spouse’s death? In particular, is the residence nil rate band and transferable residence nil rate band available on the surviving spouse's death?

read titleRead full title
Published on LexisPSL on 02/06/2021

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • Where a 50% beneficial interest in a residential property was left on discretionary Will trust and within two years was appointed to the surviving spouse for life, but with no provision made as to the remainder interest, what happens on the surviving spouse’s death? In particular, is the residence nil rate band and transferable residence nil rate band available on the surviving spouse's death?

Where a 50% beneficial interest in a residential property was left on discretionary Will trust and within two years was appointed to the surviving spouse for life, but with no provision made as to the remainder interest, what happens on the surviving spouse’s death? In particular, is the residence nil rate band and transferable residence nil rate band available on the surviving spouse's death?

We have assumed that

  1. the surviving spouse’s own 50% beneficial interest in the property passes by their own Will to their children or other lineal descendants

  2. the residence nil rate band (RNRB) was not used on the first spouse’s death, such that a full 100% RNRB was available to be transferred to the surviving spouse’s estate on their death

  3. neither estate exceeds the £2m taper threshold for the purposes of claiming the RNRB

The destination of the trust assets (ie the first spouse’s 50% beneficial interest in the property) following the cessation of the surviving spouse’s life interest (due to their death) will depend on the precise wording of the first spouse’s Will and that of the subsequent deed of appointment. If not disposed of adequately by the deed of appointment, the assets may revert to be held on the original terms of the discretionary trust created by the first spouse’s Will. See: Administration of trusts—overview.

If the remainder of the trust assets

Popular documents